Blue vs. Red, this time with gas prices

Comment on the January 25 prediction: 1/2 CORRECT (Marathon raised prices to $3.29 last Monday night and some stations followed), 1/2 WRONG (Speedway did not follow).

Sunday, February 2, 2025, 10 AM: I did not have on my bingo card that Speedway would become a hero for gas prices in 2025, but here we are. Twice in January, Marathon initiated a spike to $3.29 in west Michigan, only to have Speedway shrug. Other retailers, experts in the game of follow-the-leader, have been confused. I saw one of the K&G’s match Marathon, while another didn’t. A few Shells were quick to follow Big Blue. Meanwhile, gas is typically under $3 a gallon at Big Red today, as if they’ve decided to start competing with low-price-leader Costco instead.

So, it has been Big Blue vs. Big Red. Is there some hidden political meaning to it all?

That brings us to the new tariffs. The ones applied to Canada have the potential to put upward pressure on gas prices. I think more likely in the short term is that the narrative that “tariffs will bring higher prices” will give retailers permission to raise prices, even if the tariffs themselves don’t have a big effect on wholesale costs. And not just gasoline.

I am going to fill up today because I have no idea what is going to happen this week. -EA

Retailers Showing Restraint So Far in 2025

Comment on the January 15 prediction: I am seeing prices below $3 in different parts of west Michigan this weekend, and there have been no price resets since my last posting, so the prediction was WRONG.

Saturday, January 25, 2025, 4 PM: I am surprised at the restraint the retailers have been showing in 2025 so far, given their behavior in 2023 and 2024. Since the last hike on January 2, oil jumped from $70 to $80 a barrel, before settling a bit below $75 yesterday. Oil’s move upward has tacked on 10 cents a gallon to the wholesale gasoline price, although I am surprised it hasn’t been worse. Put it together, and many stations are selling gas this weekend at below their cost, something they have been loathe to do the past two years. Add in the fact that January – May is usually a time of slowly rising prices, and I have to predict (again) a price reset between now and Wednesday. $3.39? -EA

$3.19? $3.29? $3.49? It’s Choose Your Own Adventure Time Again.

Comment on the January 5 prediction: Somehow prices actually declined, so the prediction was WRONG.

Wednesday, January 15, 2025, 7 PM: Oil has continued its New Year climb, which finally led to a price reset yesterday, with stations in west Michigan jumping from below $3 to $3.19. That was a mild hike, one that did not grab the kind of margins we saw in 2024. Marathon apparently agreed, because they started posting $3.29 last night. I saw one Shell station follow suit, in Ottawa County, but so far the rest are holding at $3.19.

However, updating my spreadsheets tonight, I see oil surged again, to $80 a barrel. Wholesale gas prices should follow suit, so the question is how long will it take to hit retail prices? I would not be surprised if more stations add a dime to get to $3.29 tomorrow, but I also would not be surprised if they all wait until Monday or Tuesday to post $3.49. Either way, I would fill up as soon as you can. -EA

Our Annual Winter Waxing of Prices To Begin

Sunday, January 5, 2025, 9 AM: Happy New Year! We are back, and since this is January, seasonal patterns suggest we are going to see gas prices move higher from now until May or June. If so, it looks like we bottomed out right after Thanksgiving in 2024, a bit earlier than usual.

New year’s action in the oil futures market saw a bit of a spike last week, from $70 to $74 a barrel. That should start to affect wholesale gasoline prices, and then retail prices. Also, here in Michigan, the gas tax is a bit higher: 31 cents a gallon vs. 30 cents in 2024.

There was a price reset right before New Years, though, so retail prices already have healthy margins cooked in. Nevertheless, we could see a further jump to $3.39 a gallon this week. That’s a prediction. -EA

And we wrap up 2024: prices up, prices down, margins too high

Comment on the December 8 prediction: Prices rose to $3.19 on December 10, as CORRECT-ly predicted. However, I was asleep for the reset to $3.25 earlier this week, although our GasBuddy had something to say about it.

Friday, December 20, 2024, 11 AM: As I’ve written previously, there is normally a seasonal pattern to gas prices, with prices bottoming out sometime in December most years. Has that happened again this month? Maybe. Probably. Or the low was Thanksgiving weekend. See the weekly Detroit chart that is available to the public.

A summary of the past year: last December, we were also in the $2.80’s before retail prices in Michigan worked their way up to the $3.80’s in April. There was a reset to $3.99 in late July, but we were back to the $3.20’s by Election Day, and then below $3 afterwards. Today, back in the $3.20’s. Oil prices were remarkably stable during 2024, wobbling between $65 and $87 a barrel. Gas prices basically followed gyrations in oil prices, and investors in energy weren’t really rewarded this year. In Michigan, retailers were successful setting higher margins (re: profits) on pump prices this year, sadly.

Well, that’s it from me in 2024. Although the stock market acted up this week, I’m not expecting much with oil or gas prices until January. (But that’s not a prediction.)  Thank you to our loyal readers. -EA

Same old, same old. Probably going to jump back over $3 soon.

Comment on the November 24 prediction: Pretty much CORRECT, as prices rose soon after to $3.29, except for some stations that shrugged and said no.

Sunday, December 8, 2024, 7 PM: Looks like we are pretty much back where we were with my last posting before Thanksgiving. Wholesale prices continue to flatline and retail prices continue to drip lower. The Syria news doesn’t seem to be having any immediate effect on oil traders. So, expecting a reset again in the next few days, maybe just to $3.19 this time, but $3.29 would not surprise me.

Historically, gas prices bottom out in December before beginning a climb in the new year. Are we at the bottom, or will it be later this month? -EA

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